Environmental Analysis Sikorsky Aircraft: Environmental Analysis Pest

Environmental Analysis

Sikorsky Aircraft: Environmental analysis

PEST analysis

Political

At present, the U.S. is still embroiled in numerous conflicts abroad, although it is pulling out of one of its major conflicts (Afghanistan) slowly. Regardless of whatever party assumes control over the White House in the future, there will still be strong demand for military vehicles, including Sikorsky Aircraft Black Hawks.

Economic

However, the shaky U.S. economy means that there will likely be less available funds for military spending on vehicles such as the Black Hawk helicopter, which forms the core of the Sikorsky brand

Social

Socially, once again the economy plays a role upon in terms of public perception of the company: citizens are more reticent about supporting military spending, when many Americans are dependent upon social service organizations for basic necessities and cutbacks are necessary 'across the board.'

Technological

Sikorsky places a premium upon innovation in its aircraft technology. However, it should be noted that in the future conventional aircrafts may become less important in warfare, as they may be replaced with 'drones' and other non-manned vehicles. Sikorsky is currently developing an unmanned version of its famous Black Hawk, but Eurocopter, Kaman Corp. Of Bloomfield and Boeing, Sikorsky's major competitors have already created unmanned helicopters. "They [Sikorsky] are behind the curve a little bit, in that other manufacturer's around the world have been looking at unmanned versions of traditional helicopters for years" (Gershon 2010)

Porter's Five Forces

Threat of new entrants

Low, given the high start-up costs for this particular product.

Power of buyers

Strong because it is relatively limited -- Sikorsky has a limited number of venues in which to sell its aircrafts, and primarily does business with the government.

Power of suppliers

High, given the need for specific materials to create the company's high-tech products.

Threat of substitutes

Few substitutes exist for the type of technology sold by Sikorsky.

Rivalry

High, given that there are a number of other rival firms selling military technology to the government.

SWOT

Strengths

Famed for its Black Hawk helicopter and Sea Hawk

Long-standing reputation in the industry, having been founded in 1925

Continued need for the product to maintain the U.S. military

Weaknesses

Development of new forms of technology to wage warfare (such as drones) company is only beginning to explore

Competition from other manufacturers, such as Lockheed

Slow development of unmanned planes

Opportunities

Potential to collaborate with rivals, as it is currently doing with Lockheed on Marine helicopters (Former rivals Lockheed and Sikorsky partner for new presidential chopper, 2010,The Hill)

Recent creation of unmanned Black Hawk, merging drone technology with trusted Black Hawk name

Established name creates partnership opportunities with government technology agencies, academic institutions, other UTC facilities and entrepreneurial businesses (Innovations, 2010, Sikorsky).

Threats

Other companies with more established reputations in creating drones

Demands for cost-cutting due to economic conditions

Public resentment of money spent on military in a sluggish economy

Long-term objectives: Mission and values